The last bank in Colorado to openly do business with the medical marijuana industry has announced that it will no longer do so. The banks have caved in to federal demands they do extra monitoring and reporting on their customers in the marijuana business, fearing the feds could have worse in mind for them than they've stated. Dispensaries throughout the state are preparing to go cash-only.

The IRS announced that medical marijuana dispensaries, which the federal government does not recognize as nonprofits even when their states do, cannot deduct the major costs of doing business on their tax returns -- rent, payroll, etc. -- a move that could make collective provision of marijuana to patients difficult to continue. Harborside Health Center in Oakland, a major and well-respected leader in the field (our Scott Morgan has dubbed Harborside "The Best Place in the World to Buy Marijuana"), paid millions in taxes but owes millions more. They say they'll have to stop operating if the appeals process fails to reverse the decision.

Tomorrow California US Attorneys say they'll announce a new "strategy," including forfeiture actions and maybe worse against property owners who rent buildings or land to medical marijuana businesses. It's not a completely new threat, but it is sounding like an enlarged one.

On that last item, Dale Gieringer of California NORML has pointed out that the news while bad may not be completely bad. Two paragraphs from an article today in California Watch discuss a February memorandum in which federal prosecutors in California indicate what types of businesses are "more likely" to be prosecuted. This could at least provide some guidance if not assurance to providers as to what they can probably do without ending up behind bars:

The memorandum sets thresholds that make investigations more likely to be prosecuted. Those include distributors caught with at least 200 kilograms of marijuana, including distribution near schools, playgrounds and colleges; cultivators with gardens of at least 1,000 plants that are not on federal land and at least 500 plants on federal or tribal land or where there is significant damage; and dispensaries that sell more than 200 kilograms or 1,000 plants annually.

Prosecutors also are looking for provable ties to international drug-trafficking organizations or instances in which marijuana is distributed outside of California. The memorandum also outlines guidelines for civil forfeitures for those who indirectly participate – like landlords or property owners – in marijuana operations.

That's not enough to rest easy, and it's not clear how workable a distribution system could be left if prosecutors succeed in implementing such a restrictive standard. The part about "distribution near schools, playgrounds and colleges" depends critically on how the word "near" is interpreted. If they go with the senseless but oft-legislated 1,000-foot rule, that could eliminate nearly all locations within a lot of cities. But perhaps it's better than nothing.

Oaksterdam's Richard Lee of Prop 19 fame pointed out another, only slightly comforting bright side, in the IRS side of things, Monday in the Bay Citizen:

Lee said Harborside's battle with the IRS shows that the medical marijuana industry is making progress.

"At least it's better to be bankrupted than incarcerated," he said.

Speaking of incarceration, another way the Obama administration has let down medical marijuana advocates is letting prosecutors continue with cases brought against medical marijuana providers from before Obama became president who would probably not have been targeted for prosecution under the guidelines his DOJ announced. Mollie Fry and Dale Schafer are the most recent to start prison terms, and their are others left behind, including my friend Bryan Epis.

Having laid all that out, I should say that I don't see any of this as cause to despair or give up -- and I hope that people don't give up. It's just a challenge facing the issue and the movement. With popular opinion strongly on the side of medical marijuana in some form, and moving strongly toward support for actual legalization of marijuana, it's only a matter of time before the bureaucratic and prosecutorial campaigns to squash medical marijuana retreat into the past. The question is how much harm will be done -- how many lives will the government needlessly ruin -- in the meanwhile.

It's true. The government can't decide who does or doesn't have Constitutional rights. That's the whole point of Constitutional rights in the first place. The whole reason the Second Amendment is stated in the Bill of Rights is so that the government can't do this.

How about this: when Obama starts sucking up to his base and liberal/progressive sites such as moveon.org, change.org, firedoglake, huffpo, etc., they can give the big finger to him; and if they don't, all the young people who support MJ legalization and frequent these sites can give the big finger to them.

I'm pretty sure young people (and not so young) are tired of this shit. Enough of the politicians and the tainted, corporate largess.

In 2011 we again need to rise up and take back what is ours. Its the same song and dance all over again. The people us are being repressed with insane taxing and rules to control us. There is nothing different from 1776 and what happpend then. And what is happening now.

Medical marijuana dispensaries can get state tax exemptions as nonprofits, when the state is willing to recognize them. But the federal government won't grant exemptions to them because of the federal illegality. That's not the exact issue here -- it's what expenses can be deducted from the profits when calculating the taxes owed -- but if they could get federal tax exemption that might not matter because there wouldn't be taxes.

Notice all this strong arming is coming even when tens of thousands of Americans have voted for a marijuana question for the White House to answer. It is obvious what their answer would be from what they are doing: NO!

"No, period. No discussion. We are in charge and we can change the rules whenever we want to; and we don't care if we hurt people, even people who are sick. " This is the fed's message. This must be Obama's answer since he has been evading the public with a reasonable and responsible statement. From the looks of it, it would seem that the Fed's want to shut down the whole thing without a debate, it's a war against the people. For what Mr President? Why can't you allow people to pay taxes and run legitimate businesses and add to the above ground economy?

This should not only be a no-brainer, but how a civilized society works. You sir Fed govt are acting like predator animals trying to strip this country of any "green shoots." There is another way it is called sales taxes on happy consumers and sick patients.

Please Mr. President and the rest of the fed, stop this brutal attack upon legitimate Americans. Please stop; we do not want to be at war with you. We want peace. And we want to pay tax revenue and other benefits to you; and there is no need to steal it through Draconian laws and forfeiture. Please be reasonable.

And if you cannot or will not be reasonable, then We the People will throw your sorry Fascist asses Out Of Office!

If the Democratic Party cannot or will not Primary Obama for the 2012 elections with a real progressive, then nobody but the Right Wing Authoritarians in the DLC Democrat Party will be left. I don't vote for Fascists, ever! And I recommend that none of the readers here vote for Obama either. There are other, more deserving political candidates who will be running for office, from local alderman to POTUS, like the USA Green Party.

Force Obama to recognize, be innovative, escalate the issue, tell Peter Lewis, NORML, MPP, Drug Policy Alliance, and every local and state reform group to get up off their asses, get out of bed, drink their Red Bull, pray to God or whoever, get that fire burning hard in the belly. Outside of Ron Paul/Gary Johnson, I guarantee things will not be much better with any Republican candidate who panders to the religious right. They are too scared to go against the church folk. Climb that hill and Fight! Fight!

With the IRS being a federal agency, you would think knowingly taking drug money would be taboo, OH wait, IRS, never mind. Why is it okay for the ONDCP to spend public funds to print and distribute known false and misleading information? What this boils down to is respect, respect for people who need medication, respect for the peoples choices, respect for the laws of individual states, which the federal government is beholden to, respect for human rights, and respect for people. The terrorist organization we call a government, has run out the clock. They're no longer beneficial to the people, in fact they're more harmful than anything, not only to American citizens, but the world.